As a serial entrepreneur and management consultant, I'm interested in the unique dynamics of business partnership. Follow me to read about my personal experiences with partnership, as well as to learn more about how other partnerships establish the ground rules for collaboration and compensation; how they foster harmony and resolve conflict; and what tools business partners use to evolve their relationship as their business grows.

Business And Marriage: A Primer

Last week, Pia Silva and Steve Wasterval shared their experience as business partners who are also married. And apparently, the topic hit a chord. More readers responded with their insight and advice than any previous blog post. It wouldn’t be fair to keep all the tips to myself.

First, the must-dos:

Knowing your business partner

Almost every response started with an acknowledgment that your partnership is more likely to succeed if you know your business partner well. Carol Curley pointed out, in her comment on a LinkedInLinkedIn discussion board dedicated to the article, that this tenet applies to any partnership. She wrote, “Whenever you have more than one founder at a company you need to understand the personal as well as professional dynamics. Whether the team is a husband and wife, brother and sister, friends, colleagues. It is critical to understand how they resolve conflicts and who is the ultimate decision maker for different aspects of business.”

Setting boundaries and respecting them

Pia and Steve have clear delineations for their respective responsibilities and even though they talk about all issues with each other, each person has the final word on decisions within those lines. Georgie Marquez-Andre says that rule was the key to her 20-year partnership with her husband (of 34 years): “For us the key has been knowing each other’s strengths, and, as my husband puts it, each of us having ‘our own litter box.’”

What happens at work, stays at work

Given the temptation to continue to work after hours, I was surprised at how adamant some readers were about separating business from personal whenever possible. “We made a firm rule—NO BUSINESS while at home,” writes Diana Young, who owned a travel agency with her husband for two decades.

For every “do” there was also a “don’t.”

Evelyn Riyhani wrote to me about the pitfalls of business partnership between spouses. After running a construction business with her husband for 20 years, she’s decided to focus on her own career. She offered three warnings to couple considering a joint venture:

1. All of the eggs are in one basket

The fact is that when both heads of household are drawing from the same source of income, that can be a vulnerability because if the buiness fails, there’s no back-up for paychecks or benefits. “With both partners in the same business, there’s no cash flow from someone else to even out the highs and lows—but the monthly bills still need to be paid,” writes Riyhani. “If one partner has to give up working in the business so they can find a job and start bringing some money into the relationship, it makes it really hard all around.”

2. Quitting is more complicated

Riyhani says the questions that come up when you want to leave are different than quitting a regular job because the decisions is harder, especially if you contributed directly to revenue generation, and you face both immediate and long-term consequences because “the marriage creates ongoing knowledge that you’d never have to worry about if you were just quitting a job and working somewhere else.” In addition to the potential for the remaining spouse to feel betrayed or abandoned, she pointed out some practical concerns: “How do you leave for a better opportunity when you know your personal finances will crash and burn? How do you deal with leaving the business and not liking your replacement?”

3. There are legal responsibilities and liabilities to consider

In Riyhani’s case, there were industry- and state-specific legal considerations. “In the California construction industry, it’s common practice for vendors, suppliers, insurers, and bondsmen to require the spouse to sign indemnity agreements when you’re married. So, if your personal assets are now at risk, how do you indemnify your spouse’s actions in the business without actively taking a part in that business?”

Rules vary by state, but in all cases, understanding your liability is crucial because your financial safety is intertwined at a far deeper level. Trust is key, of course. But especially if there are employees or independent contractors in charge of financial parts of the business, it won’t hurt to double-check the books to avoid mistakes and foul play. After all, it’s not just your livelihood at stake; your credit, your home, and all of your assets can come into play.

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